Annual Fee Payments and Information Updates:

Maintaining your business entity in Texas starts with ensuring all annual fee payments are up to date and that your company’s information accurately reflects any recent changes.  This process is not merely administrative but foundational to your business’s legal and operational health.  It involves a detailed review and potential update of addresses, management structures, or business operations.  This step is crucial as it lays the groundwork for legal compliance and smooth business functioning.  It requires careful attention to detail, a thorough understanding of state requirements, and a systematic approach to reviewing and updating records.  At a minimum, corporations and LLC’s (business entity/s) must hold and document one annual meeting of the Officers and one annual meeting of the shareholders/membership each year. Consider consulting professionals to ensure nothing is overlooked.

Managing the Governing Bylaws or Operating Agreement:

This is part of your annual meetings for officers and shareholder/members.  The Governing Bylaws or Operating Agreement of your business entity sets forth the rules and procedures for internal governance, including management structure and financial arrangements. Changes within your business entity, such as shifts in membership or management roles, necessitate updates to this agreement.  This step is about ensuring that the operating agreement remains an accurate, current reflection of how your business entity functions and is governed.  It’s a task that requires internal consensus, legal knowledge, and strategic foresight.  Properly maintaining this document ensures that all members understand their rights and responsibilities, helping to prevent conflicts and confusion.

Appointing a Registered Agent:

Selecting a reliable registered agent is a legal requirement in Texas and a critical step in maintaining your business entity.  This agent is your business’s official contact for all legal and state communications, including service of process and tax notifications.  The choice of a registered agent is strategic and significant, as they ensure that you receive important legal documents promptly and keep your business compliant with state laws.  For businesses with home offices outside Texas, many services provide a registered agent to meet this requirement.  This step is about securing a dependable intermediary between your business and the state, ensuring that you remain informed and responsive to legal matters.

Filing Business Privilege Tax Returns and Annual Reports:

Annually, your business entity must file Business Tax Returns by April 15th.  These documents are critical in providing a comprehensive overview of your financial and operational status, helping the state assess taxes and verify compliance.  This process requires a meticulous compilation of financial records, an understanding of your business activities over the past year, and often consultation with financial advisors to ensure accuracy and completeness.  It’s a step that underscores your business entity’s transparency and accountability, affecting your legal standing and financial health.  Late submissions can result in penalties, emphasizing the importance of timeliness and precision in this process.

This step goes beyond simply issuing payment; it involves a deep understanding of your financial obligations to the state, which can vary based on factors such as income and assets.  It requires careful financial review, planning, and budgeting to ensure all obligations are met fully and on time.  Misunderstandings or under payments can lead to penalties, making it crucial to allocate sufficient time and resources to this task.  This step is not just about financial compliance but about strategic financial management and planning for your business entity’s future.

Maintaining State Records:

Your business entity’s involves updating any changes in your business entity, such as modifications in ownership, address, or management.  This must be reflected in an updated report to the state.  This step is about ensuring that your business’s legal document accurately represents its current structure and operations.  It’s a task that requires a keen understanding of how structural changes impact your legal obligations and an attention to detail in documenting those changes.  Keeping this information current is essential for legal transparency and operational clarity.

Handling Licenses and Permits:

Depending on the nature of your business and its location, various licenses and permits are required to operate legally.  This step involves identifying, obtaining, and regularly renewing all necessary licenses and permits.  It’s a task that requires staying informed about local, state, and federal regulations and understanding how they apply to your business activities.  Regular reviews and renewals are necessary to avoid lapses that could lead to legal troubles or business interruptions.  This step is critical in maintaining the legality and integrity of your business operations.

Registering a Business Entity with a Doing Business As Form:

If your business operates under a name different from its legal name, registering a ‘Doing Business As’ (DBA) name is necessary.  This step allows your business the flexibility to engage in the market under a name that best suits your brand or operational focus. It involves understanding the state’s requirements for DBA registration and maintaining this registration as needed.  While it doesn’t change the legal structure of your business entity, it’s an important aspect of your business’s public identity and marketing strategy.  Proper management of your DBA ensures that your business can operate and be recognized under its preferred name.

Navigating the complexities of maintaining an corporation or LLC in Texas can be challenging.  Seeking professional consultation is a crucial step in this process.  Whether it’s legal advisors, financial experts, or business consultants, professional guidance can provide clarity, ensure compliance, and offer strategic insights for your business’s growth and stability.  This step involves identifying the areas where professional advice is needed, selecting the right experts, and integrating their recommendations into your business practices.  It’s an investment in your business entity’s compliance, stability, and future success.  Leveraging expertise helps you navigate complexities and make informed decisions, ensuring that each step in maintaining your business entity is well-informed and strategically sound.

The post MAINTAINING YOUR BUSINESS’ LEGAL STATUS appeared first on Moak & Moak, P.C. -Attorneys At Law.

Review and Update Estate Planning Documents

Why it matters: Life circumstances change, and your estate planning documents should reflect those changes. Failure to update these documents can result in unintended distributions, family disputes, or tax complications.

Key actions:

Review Wills, trusts, and beneficiary designations to ensure they reflect your current wishes.

Confirm that powers of attorney and healthcare proxies are up to date.

Consider adding or revising charitable giving provisions to maximize tax benefits.

Assess Business Compliance and Governance

Why it matters: Businesses must maintain proper compliance to avoid penalties and legal disputes. Year-end review ensures that your company remains in good standing with regulatory authorities.

Key actions:

Confirm that business licenses, permits, and registrations are current.

Review corporate governance documents, including operating agreements, bylaws, and meeting minutes.

Evaluate contracts, vendor agreements, and leases for upcoming renewals or potential liabilities.

Review Tax and Financial Matters

Why it matters: Tax laws are complex and subject to change. Proactive planning can optimize deductions, reduce liabilities, and prevent costly mistakes.

Key actions:

Coordinate with accountants to review income, expenses, and deductions for individuals and businesses.

Consider contributions to retirement accounts, education savings plans, or charitable donations for potential tax benefits.

Examine outstanding debts, loans, or liabilities to assess risk and plan payments strategically.

Protect Family Assets and Finances

Why it matters: Safeguarding family assets is crucial for long-term security and peace of mind. Comprehensive asset protection reduces exposure to risk from creditors, lawsuits, or unforeseen events.

Key actions:

Review insurance coverage, including life, health, home, and liability policies.

Evaluate real estate holdings, investments, and other assets for proper titling and protection.

Establish or review trusts, guardianships, or other protective structures for minors or dependents.

Plan for the New Year

Why it matters: Strategic planning at year-end ensures a proactive approach to legal, financial, and operational challenges in the coming year.

Key actions:

Schedule consultations with attorneys and advisors to discuss anticipated changes in law or personal circumstances.

Establish goals for estate planning, business growth, and compliance improvements.

Review succession planning for both family and business matters to ensure continuity.

The end of the year is an opportune time to evaluate legal, financial, and operational matters for families and businesses. A comprehensive review and proactive planning can prevent unnecessary risks, optimize tax and estate strategies, and provide peace of mind as you enter the new year.

The post Year End Legal and Business Checklist appeared first on Moak & Moak, P.C. -Attorneys At Law.

Incapacity isn’t just about catastrophic accidents or permanent disability. It can be temporary. It can come in the form of a long recovery after surgery, a cancer diagnosis that takes you out of the office for months, or even an extended leave to take care of a family emergency. The bottom line is this: if you can’t be there, your business still needs to function.

The Real Risk of No Plan

As a business owner, you wear a lot of hats. You oversee operations, make the big decisions, manage key relationships, and keep the business financially afloat. So what happens when you suddenly can’t be in the office for an extended period?

Without a clear incapacity plan, the absence of leadership can create confusion—and fast. Employees might not know who’s in charge. Decisions could be delayed or made by the wrong people. Worse, family members involved in the business may assume they should step in, even if they’re not the best fit.

A lack of structure during your absence can lead to internal power struggles, operational breakdowns, and even financial loss.

What Incapacity Planning Looks Like

Incapacity planning is an extension of good estate planning. It’s about protecting your business during your lifetime—not just after you’re gone.

Here’s what a solid incapacity plan should include:

A designated decision-maker: Someone who knows the business, commands respect, and can make tough calls when you’re unavailable.

Clear communication: If your family works with you, set expectations early. Being related doesn’t automatically make someone the best person to lead.

Legal authority: Make sure your chosen backup has the legal power to act on your behalf—this often includes creating a durable power of attorney or incorporating provisions into your business operating agreement.

Operational systems: Document key processes, vendor contacts, passwords, and protocols. If you’re out, someone needs to step in seamlessly.

Why Family Isn’t Always the Best Fit

Many business owners assume a spouse, sibling, or child will take the reins if something happens. But that assumption can be risky. Family members may not have the right experience, temperament, or relationships to lead the business effectively. And assuming they’ll step up—or that others will accept them in the role—can cause unnecessary tension or confusion.

Choosing the right person means thinking about what your business actually needs to stay stable in your absence, not just who’s closest to you.

Build a Plan Before You Need One

At the end of the day, estate planning isn’t just about preparing for death—it’s about protecting what you’ve built during your lifetime. For business owners, that means thinking beyond succession and addressing incapacity head-on.

If you haven’t created a plan for who leads your business when you can’t, now is the time. We can help you identify the right person, create the necessary legal documents, and build a plan that protects your employees, your income, and your peace of mind.

Consulting with professionals who understand business operations when estate planning will provide peace of mind, knowing that your legacy is secure and your wishes will be honored.  Therefore, see an attorney with business and estate planning experience.  They should be able to work with you, your financial planning team and accountant to create the best plan.

The post Business Owners Need a Contingency Plan appeared first on Moak & Moak, P.C. -Attorneys At Law.

Following fast on the heels of a decision to go into a particular kind of business is the decision about what kind of legal form it should take. The most common options are a sole proprietorship, a partnership, or a corporation. You may lean toward the corporate route because you like the sound of having “Inc.” after the company’s name, but there are  more practical considerations to take into account.

More so than with some of the other structures for a business, starting a corporation means complying with formalities required by state laws. Once the shareholders (owners) of the business agree on some basic matters, such items are embodied in articles of incorporation that must be filed with the appropriate state agency. These essentials usually include:

• a corporate name;
• the number of shares that can be issued;
• the number of shares each owner will buy and for what contribution of cash or property;
• the nature of the corporation’s business; and,
• the identity of the directors and officers of the corporation who will handle day-to-day operations.

The fledgling corporation will also need bylaws, which constitute a procedural rule book for the company.

Decision Making

The bottom line here is that whoever holds a majority of the shares of a corporation has ultimate control over it. Usually it takes a majority of the shares to elect the board of directors, which is charged with making the “big picture” decisions. If a decision is momentous enough for the company’s future, such as a change in the articles of incorporation or whether or not to merge with another company, the shareholders usually have a more direct role in that they themselves must approve the decision by a certain margin of votes.

The board elects the officers of the corporation, typically including a president, vice-president, secretary, and treasurer. The officers may or may not be salaried employees or shareholders, and in some cases one person may hold more than one office.

Accountability

At or near the top of the list of characteristics favoring the corporate structure is the fact that, since the corporation is treated as a legal “person” separate from the people who own and run it, the shareholders as a rule are not personally liable for the corporation’s debts. Instead, their risk is confined to their investment in the company. To every rule there is an exception, however, and here the exception has the colorful legal name of “piercing the corporate veil.” If the owners do not comply with the statutory requirements for running a corporation, or if they blur the lines too much between corporate and personal finances, the legal fiction of the corporation as a separate entity is ignored and the owners are on the hook for the corporation’s losses.

Transitions

As a separate entity in the eyes of the law, a corporation does not go out of existence if one or more of its owners die. Instead, a corporation stays alive until its owners decide otherwise. Transfer of the ownership of the corporation is accomplished by selling its stock. New owners are added either when existing owners sell some of their stock or the corporation itself sells more shares of stock. The smaller the enterprise, the more likely it is that the owners, for whom the corporation may be both their property and their employer, may agree to restrict the sale of the stock in order to maintain control.

The particular circumstances of each new business and the differences in the governing laws of the states make generalities difficult. That said, the factors on the debit side of the ledger for corporations include the costs of setting up the corporate entity, the need for a separate tax return, and the burden of “double taxation.” Double taxation means that the corporation is taxed on its profits, and the shareholders are then taxed on their dividends. On the credit side are limited liability for the owners and easy transfer of ownership.

Making the appropriate choice for a business form is one of the first, and one of the most important, decisions a new business will make. You should consult a qualified attorney when forming a business enterprise so that they can help you understand what business form is right for your specific needs.

The post SHOULD YOU INCORPORATE YOUR BUSINESS? appeared first on Moak & Moak, P.C. -Attorneys At Law.

Lawyers across the country are sending notice to their clients that they, along with millions of other business owners in the country, are now required to submit Beneficial Ownership Information (BOI) to FinCEN’s new database.

Beneficial Ownership Information (BOI) for the entity will include the entity’s name, address and tax identification number.  BOI for each owner in the entity will include the owner’s name, current residential address, date of birth, either driver’s license or passport number, and a copy of the current driver’s license or passport with a clear picture of the person.  The disclosure requirements for owners only apply to individuals that excercise substantial constrol over the entity, or who own at least 25% of the entity.  After submitting this BOI in an intial report, the entity will need to update the report anytime provided information changes (like an address).

The deadline to submit BOI to FinCEN depends on when the entity was formed.  Entities formed after January 1, 2024, must submit complete information within 90 days of the formation date.  Entities formed before January 1, 2024, must submit complete information by January 1, 2025.

Failure to comply with the CTA can result in civil penalties up to $10,000.00 and/or up to 2 years imprisonment.

This law represents a dramatic change for business owners.  You will likely have questions.  The best source for information is FinCEN’s frequently asked questions page www.fincen.gov/boi-faqs and FinCEN’s Small Business Compliance Guidewww.fincen.gov/boi/small-entity-compliance-guide.  FinCEN is still making adjustments to its requirements, so their official FA page is the best place to get the most current guidance.

As a policy, most law firms will not upload BOI on behalf of clients.  FinCEN has designed an online portal to submit information quickly and conveniently, see www.boiefiling.fincen.gov.  The portal is designed well enough for non-attorneys to submit their information without difficulty.

If you do not wish to submit the BOI reports yourself, my recommendation is to use a corporate service or registered agent service company.  PLEASE BE AWARE THAT THERE ARE MANY COMPANIES OFFERING TO SUBMIT BOI REPORTS AND SOME OF THEM ARE FRAUDULENT SCHEMES TO STEAL YOUR PERSONAL INFORMATION.  Therefore, it is recommended that you use only companies with an established record of providing corporate services.

As with any legal matter, if you have questions regarding the Corporate Transparency Act, you should consult an attorney familiar with business entity law.

The post Corporate Transparency Act appeared first on Moak & Moak, P.C. -Attorneys At Law.

The post Livestock Mortality Insurance appeared first on Moak & Moak, P.C. -Attorneys At Law.

Estate planning involves creating a comprehensive legal plan for the management and distribution of your assets after your death. Your assets include all possessions of value, including property, bank accounts, insurance, etc. that are tied to your business. Your estate plan should also include financial instructions and medical directives in case you suddenly fall ill and become incapacitated.

To protect your business and your family, consider these tips to start your estate planning on the right path.

#1 Decide the future of your business

Before you start preparing your  estate planning documents, first imagine if there is a future for your business without you running it. Here are some questions  to help you in your decisions:

What is your Succession Plan?

How will the business continue without you? Do you have a Succession Plan? Many business owners will gesture towards their business and say “THIS is my succession plan.” However, this view may leave out important considerations for transfer of the business, your or your surviving spouse’s income needs, and other important topics.

A Succession Plan is a strategy for the successful transfer of business operations, management and ownership to partners, future generations, or successors. It is important to create a succession plan as part of your estate plan to ensure that whoever replaces you as a business owner is someone you fully trust.  The succession plan should include details about not only how the property and financial assets of the business will be transferred to a new owner, but how your income needs will be met after the transfer.

Would you rather sell the business instead?

Can you and your family live comfortably from the sale proceeds when you retire? If so, selling the business might be the better option. If you’re a sole proprietor, the process is relatively straight forward. But if you have a corporation, an LLC, or multiple business partners, you may need a Buy-Sell Agreement to facilitate the sale of your ownership. Generally, any current co-owners of the business will have a right of first refusal on purchasing any interest that has become available.

#2 Organize your business records

Make the hand-over process easy for your successors by having a secure and organized filing system for your business records. Here are just some of the more important records that you need to update and prepare for your estate plan:

Your business plan

State-filed documents, such as Articles of Organization or Incorporation

Your Operating Agreement, if any

Your Succession Plan, if any

Financial records and statements

Tax returns

Insurance policies

Business licenses

A note on Insurance Policies:

Apart from having a general life and disability insurance and naming your family as beneficiaries, you might consider purchasing a separate life and disability insurance policy for your business called a “key person” policy.

With a key person policy, you can name your business as the beneficiary. These policies provide payouts when a “key person” in the company passes away or experiences a disability. This money could be a lifeline for your small business.  This money can also be used to fund the buy-out provision of a Buy-Sell Agreement, providing ready cash to the new owners to pay your surviving spouse or other heirs for the value of your business.

#3 Appoint an Agent in a Power of Attorney

It is in your best interest  as a business owner to appoint someone that you trust to be your agent under a power of attorney who can oversee your business and finances on your behalf.

A durable power of attorney is a legal tool that involves appointing a trusted individual to handle your finances if you can no longer make decisions due to health reasons such as being in a coma, developing dementia or becoming too ill to make decisions.

While an ordinary Power of Attorney expires if you become mentally incapacitated, a Durable Power of Attorney remains intact even if you become incapacitated.

In Texas, a Durable Power of Attorney can become active whenever you choose. You can make it take effect immediately or choose a specific date in the future.

What can an authorized agent do with a Durable Power of Attorney?

Buy and sell property

Manage bank accounts, bills, and investments

File tax returns

Apply for government benefits

Manage your business

#4 Audit and review

To help you make smart decisions for your estate plan, you need to take a hard look at your business and personal situation by answering these questions:

If you die today, what is the current net worth of your personal and business assets? This can be done by totaling your current assets and liabilities and adding the value of any life insurance.

Estate planning is complex, especially for entrepreneurs and owners of small and medium businesses. The right attorney can help you protect your business and your family after you’re gone, advise you on such issues as taxes, organize titles and trust documents, and facilitate the smooth transfer of assets and business operations to your beneficiaries.

A skilled estate planning attorney can devise a plan to help you transfer your business assets and make life easier for your heirs. As I have said before, planning ahead and seeking an attorney with experience in estate planning will  make the process easier.

The post Business Owners and Estate Planning appeared first on Moak & Moak, P.C. -Attorneys At Law.

Deciding whether to incorporate:    

In deciding what type of organization you want to do bs under, there are tax & nontax considerations that should be discussed with your attorney and tax professional.

Non-tax Considerations:   

The shareholder-owners are NOT PERSONALLY LIABLE for the Corporation’s debts.  This means shareholder’s losses are limited to their investment in the stock.  In general, shareholders may freely transfer their ownership rights to others (i.e., sell out).   The legal existence of a corporation is perpetual unless a shorter term is stated in the Articles of Incorporation.   Under corporate statutes, a corporation is to be managed by, or under the direction of, a board of directors.  A corporation can raise capital, not only by making or borrowing it, but they can sell stock.

Tax Considerations:   

In considering whether or not to incorporate, the effects of DOUBLE TAXATION should be considered.  Double taxation is the result of the corporation being taxed on its profits and the shareholders being taxed on their disbursements.  One can eliminate Double Taxation by i) not becoming a corporation but a Partnership instead; or ii) becoming a SUB S Corporation.

How to incorporate:

The first step is to prepare the Articles of Incorporation.  The person who prepares these articles must be over the age of 18 and is referred to as “the Incorporator.”  The articles must contain the name of the corporation, the corporation’s purpose and its duration along with several other requirements.  The incorporator must file the Articles of Incorporation with the Secretary of State.  Upon the issuance of the certificate of incorporation, the corporation’s existence shall begin, and such certificate shall be conclusive evidence that all conditions precedent to be corporation have been complied with.  After the corporation gets its Certificate of Articles of Incorporation, then it shall hold an organizational meeting of its Board of Directors.  A corporation shall not transact any business or incur any indebtedness until it has received for the issuance of shares consideration of the value of at least $1000 consisting of money, labor done, or property.

3 Entities that make up Corporation.  They are as follows:

Shareholders   – Provide the cash.

Directors         – Are in charge of

the management.

Officers           – Lead by the CEO, are charged with implementing the plans of Corporation in order to reach its goals.

Many people opted for corporate status because of the Limited Liability associated w/it, and thus the only risk was your initial investment.

Generally, shareholders are protected, but in rare circumstances there may be a time when parties go beyond a corporation & make the shareholders liable.  This is known as piercing the corporate veil.  Not only can shareholders be “shielded” from liability, but a Parent Company can be as well “shielded” as well from the liability of its subsidiaries.

The formation of a corporation or limited liability company is done primarily for liability purposes, but there are estate planning and tax concerns as well.  If you are thinking of starting a new or have an existing business, then you should consult with a tax advisor and attorney.  These professionals can help you determine what is the best form of entity for your particular business.

The post What is the Difference Between a Partnership and Corporation? Part 2 appeared first on Moak & Moak, P.C. -Attorneys At Law.

A partnership is an association of two or more persons to carry on as owners of a business for profit.  What does “carry on” mean?  It is the operation as an ongoing business.  The partnership does not have to actually make a profit and if it does the profits do not have to be equally shared.  However, the partnership must have an agreement to share profits to be valid.  If there is no such agreement, then no partnership.  The partners making up the partnership can be secret, silent or dormant partners.  A secret partner actively participates in the partnership affairs, but his association is generally unknown.  A silent partner is one whose status as a partner is generally and publicly known but does not participate in the management of partnership affairs.  A dormant partner is one whose association with the partnership is generally unknown & who takes no part in the management of partnership affairs.

There is no specific format or formalities that are necessary in order to create a partnership and it may be created without any form of written instrument.  While no written instrument is required you may have one.  The partnership relationship is highly fiduciary in nature.  The partners dealings with each other are subject to the same scrutiny and imputations as transactions with any ordinary trustee/beneficiary relationship. This requires the utmost degree of good faith and fair dealing.

Generally, a partner is not entitled to compensation (i.e., a salary) for his services to the partnership, no matter how valuable his services may be.  Compensation comes instead from their share of the profits.

The general rule on liability is that every partner is an agent of the partnership for the purposes of its business and the act of every partner.  All partners are jointly and severally liable for the actions and debts of the partnership.  Any person not a member of the partnership may hold the partnership liable for any loss, injury or penalty resulting from where a partner commits any wrongful act or commission.  Additionally, once the partnership assets are depleted in payment of its debts, the personal estates of the partners may be looked at for satisfaction of the partnership’s obligations.   When one partner dies in a two-person partnership, this ends the partnership.  This can leave a dilemma if the partnership owns real estate or debts.   Furthermore, there are certain actions that require agreement between all of the partners to be valid.  As with any rule there are exceptions to this.

Next week I will discuss and describe some of the aspects of a corporation and why that might be the choice of your business entity.

Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C.  He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.

The post What is the Difference Between a Partnership and Corporation? Part 1 appeared first on Moak & Moak, P.C. -Attorneys At Law.

Both heart and mind must be working well if the owners of a new small business are to experience success. While it is only human nature, not to mention fun, to indulge one’s imagination about what a new business started from scratch could be like, would-be entrepreneurs need to engage in some cold, hard thinking and planning before taking the plunge. At the risk of pouring cold water on some of the anticipation and excitement, what follows is a guide for how to plan for and think through the many decisions that must be made well before you have that “Grand Opening” sign made.

Why?

This may seem obvious, but you should know just what your reasons are for wanting to start a new business. If the motivations are weak, odds are the business will be a bust, but well-founded reasons can help a business persevere through good times and bad. Some common reasons for starting a new business include escaping the whole 9-to-5 routine (though it may be replaced by an 8-to-8 routine), answering to no one else, upgrading your standard of living, and being convinced that you can provide a needed product or service.

Why Me?

Let’s face it, not everyone is cut out to be a captain of industry, or even captain of a small business. Maybe you need not subject yourself to an intensive psychological and life-experiences evaluation, but be honest with yourself about whether you have the necessary characteristics, skills, and experience.

A few examples give you the idea:

Can you make yourself pull the trigger on an important decision?

Do you see competition as exciting or just stress-inducing?

Are you willing and able to plan ahead?

Do you like interacting with people you don’t know?

Do you have the perseverance, not to mention the physical stamina and health, to put in long hours if that’s what is needed to make the business succeed?

Are you, and anyone else financially dependent on you, prepared to risk your savings in pursuit of the business dream if that’s what it takes?

Unless you are planning a one-man band of a business, are you comfortable with hiring, supervising, and possibly having to fire other people?

Are you reasonably well organized?

Do you know anything about the paperwork and legal side of running a business, such as payroll and accounting, the permits or licenses you will need, or the regulations and laws that may apply to the business?

Why This Business?

You may have the best motives and a skill set that would be the envy of any MBA graduate, but if there is no niche for your planned business, or, simply put, if not enough people will want to buy what you are selling, the new business will fail. The variables here include timing, location, and simply whether your business is feasible or practicable, so that you can be the one to fill that niche that you have first identified. Don’t make your business the equivalent of carrying coals to Newcastle.

In economic terms, you want to do some investigation to determine if there is some currently unmet demand for the product or service you want to supply. Then you want to meet that demand with a product or service that is competitive in quality, selection, price, and/or location. In short, learn as much as you can about the market you will be in. Learn who your customers will be and try to understand their needs and desires. Anticipate how your fledgling business will compare with any established competitors. What can you do in setting up and running the business to make sure you get your share of whatever market there is for your product or service?

How?

Turning the idea into bricks and mortar (literally or figuratively) involves a lot of decisions, some of which are best made only after getting professional advice. Still, you should acquire at least a layperson’s understanding of the pros, cons, and consequences of each decision.

Choose a name for the business that you find appealing, but also one that is informative for someone hearing it for the first time. Select the most appropriate business form, such as a sole proprietorship, a partnership, or a corporation. Investigate which local, state, and federal laws and regulations will apply to the business. This will run the gamut from laws of universal application (e.g., taxes) to laws specific to your business.

Make an unflinching and detailed examination of your financial picture. How much do you have now, how much will you need to start the business, and how much will you need to stay in business? Projecting cash flow into the future means taking into account such variables as seasonal trends in sales, the amount of cash taken out of the business for personal expenses, whether and when to expand the business, and the rate at which customers will pay off accounts if credit is extended to them.

Find a location for the business that is convenient for customers, appropriate in size and configuration, and zoned so as to allow your type of business. When you have settled on the product or service you will sell, calculate the inventory you should create and maintain and locate reliable suppliers.

Finally, if you go to all the trouble and expense involved in creating a small business, don’t forget to think about protecting against losing the business from such threats as fire, theft, robbery, vandalism, and liability for an accident. This means taking measures to provide security, but also arranging for the appropriate types and levels of insurance.

There are several excellent local resources to assist you with starting a business, the Small Business Development Center at Sam Houston State University, your local banker, financial advisor, CPA, the Chamber of Commerce, insurance agent and an attorney who is well versed in the formation of business entities.

Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas. www.moakandmoak.com

The post BUSINESS START-UP CHECKLIST appeared first on Moak & Moak, P.C. -Attorneys At Law.